This is an interesting discussion. I am new to turning, but have a lot
of experience with pricing. The principles are always the same.

Setting price has nothing to do with the cost of an article or
service. It has everything to do with the value in the marketplace. If
a piece is for utility only, then contrasting it with other
substitutes can give an idea of market price. If it is more durable
than substitute X (and durability is important or a "good"), the price
will be higher than X's price. If it is less attractive than
substitute Y (and being attractive is a "good"), then the price will
be lower than Y's price. These examples are "all else being equal".

The same thinking applies to all the other attributes discussed like
beauty, value of handmade, uniqueness, etc.

Cost. Cost does have one important function at this point. After we
determine what the market price is, we all decide whether or not to
supply the article based on our cost.

So, what happens if you use cost (sometimes called Cost Plus Pricing)
to determine your price. Three cases: If your Cost Plus (CP) is below
the market, you leave money on the table. If CP is the same as market,
you are right by accident. If CP is higher than market, noone will buy
your products.

This is a simplistic explanation, but it is true and useful to
understand. I have explained this to marketing VPs and CEO who didn't
get it.

I hope that I didn't bore anyone. Being a turning newbie I thought
that I might be able to contribute for once.

John